The Australian Taxation Office (“ATO”) has extended the taxi travel exemption to include ride-sourcing vehicles, for fringe benefits tax (“FBT”) purposes.
Before the amendment, a taxi was defined for FBT purposes as ‘a motor vehicle licensed to operate as a taxi’. FBT exemption did not extend to ride-sourcing services provided in vehicles that were not licensed to operate as a taxi.
Pursuant to the amendment, employers will now be eligible for the Fringe Benefit Tax (“FBT”) exemption for travel provided to their employees, if it’s a single trip to or from the employee’s workplace:
Travel is also FBT exempt if it is as a result of sickness, or injury to, the employee, and whole or part of the journey is directly between:
The change means any benefit arising from travel by an employee using a registered taxi or ride-sourcing provider (other than in a limousine) is now exempt from FBT subject. The employers will have to review the travel policies offered to the employees.
Australia’s antitrust authority launched federal court proceedings against Alphabet Inc.’s Google for allegedly misleading millions of consumers about expanded use of personal information for targeted advertising.
The Australian Competition and Consumer Commission (“ACCC”) has claimed, Google failed to properly inform consumers, and did not gain their explicit consent, about its move in 2016 to start combining personal information in users’ Google accounts, which also included browsing information on non-Google sites. As a result, data about users’ non-Google online activity became linked to their names and other identifying information held by Google. Previously, this information was kept separate from users’ accounts, and the data was not linked to an individual user.
“ Google significantly increased the scope of information it collected about consumers on a personally identifiable basis. This included potentially very sensitive and private information about their activities on third-party websites. The use of this new combined information allowed Google to increase significantly the value of its advertising products, from which it generated much higher profits.”
Brazil has proposed a “COFINS-Digital” tax through its Bill No. 131/2020. COFINS-Digital will be a separate tax on legal entities operating in the digital economy sector and it will be levied at a rate of 10.6% on the gross monthly revenue earned in relation to digital services.
The COFINS-Digital tax will be applicable to legal entities, irrespective of their location of the establishment, whose monthly revenue exceeds USD 20 million for services provided worldwide or more than BRL 6.5 million for services provided in Brazil.
If approved, there will be an increase in tax liability for businesses involved in providing digital services that exceed the revenue criteria.
Brazil’s National Congress has passed a Decree 10,422, of July 13, 2020, under Brazil’s Law No. 14,020, of July 6, 2020, for reducing the economic and social impact of the COVID-19 pandemic in Brazil.
The objective of Law No. 14,020 is to preserve employment and income, provide guarantee towards the continuity of work and business activities, etc. and create a program called “Emergency Benefit of Preservation of Employment and Income.” Under this program, the maximum extension period for suspension of employment contracts and reduction of wages was 90 days and 60 days, respectively.
The decree 10,422 has extended such period by 30 days and 60 days for suspension of employment contracts and reduction of wages, respectively. Thus, the maximum emergency benefit period is 120 days in both scenarios.
Here, the employer is required to register the worker on the portal of Brazil’s Ministry of Economy for requesting payment of the benefit.
Employers in Brazil can avail of the emergency benefits of preservation of employment and income for an extended period as provided.
The State Secretary of Finance (“SEFAZ”) of Brazil has announced changes in Brazil’s electronic invoicing system. The changes include new types of electronic tax documents, new functionalities of the SAFEZ platform, etc.
Earlier, the delivery notes (“Canhotos”) were generated and signed on paper as a part of DANFE (Documento Auxiliar da Nota Fiscal Eletrônica) or DACTE (Documento Auxiliar de Conhecimento de Transporte Eletrônico) system.
From August 2020, Canhotos for invoice (Nota Fiscal Eletrônica - NF-e) and transportation invoice (Conhecimento de Trasporte Eletrônico - CT-e) can be issued electronically. However, the issuance in electronic format is voluntary and printed version of DANFE and DACTE system is still in use.
Effective from July 1, 2020, British Columbia (“B.C.”) has introduced the Provincial Sales Tax (“PST”) on digital services provided by non-resident businesses to the consumers residing in B.C. province. The PST rate will be 7% on these types of supplies. This will be subject to the annual registration threshold of CAD 10,000 and will apply to electronic services such as music, internet services, streaming games, applications, e-books, e-journals, films, etc.
There will be an increase in compliance as businesses involved in providing digital services to consumers in British Columbia (“B.C.”) province are now subject to PST.
Canada’s Federal Government has proposed to extend the “Canada Emergency Wage Subsidy” (“CEWS”) from August 29, 2020, until December 2020. It will be available to all employers who have experienced any decline in business revenue from July 2020 to November 2020 as compared to the respective prior months in 2019. Currently, there is a 30% revenue declined threshold.
Effective from August 14, 2020, there will be significant changes to the Workers Compensation Act. Some of the major changes are as follows:
However, the following provisions are taking effect from January 1, 2021:
Employer and employee contribution to social insurance and housing fund is mandatory in China. The payments are withheld by the employer and the same is remitted to the local authorities where the company is registered. In case the employer is registered in one city such as Shanghai and needs to hire an employee in Beijing, then the company is bound to make social insurance and housing fund contributions for the employee in Beijing. Till now, for complying with these obligations, the company used to hire the local HR agencies such as CIIC, China Star, FESCO, etc. for handling the withholding payment of social insurance and housing fund (SI & HF) for the employees in Beijing.
However, Beijing social insurance authorities on June 30, 2020, issued an internal notice ( the Notice on Issues Regarding Labor Dispatch Enterprises and Human Resource Service Enterprises Participating in Social Insurance Scheme ) regarding the administration management of social insurance and housing fund payments handled by local HR agencies on behalf of its clients. As per the notice if a local HR agency enrolls the employee under its account for social insurance and housing fund contribution purpose, it is mandatory in the employment contract to input the following information:
Based on the above changes specified by the internal notice, the local HR agencies are not able to either enroll the new employee or continue to handle the existing enrolled employee for social insurance and housing fund payment, if the employer in the employment contract is different to the employee's social insurance and housing fund withholding party (i.e. the HR agent). Hence the agent will have to cease providing the social insurance and housing fund withholding payment service for its clients.
The company must take immediate action to ensure that the social insurance and housing fund payments for Beijing employees are not disturbed. There are following three options available:
The notice is currently applicable to Beijing only and it is highly likely to become a law in other cities too. In case if this becomes effective in another city like Shanghai then it will mean that every company will need branches in every city they plan to employ in a similar manner as that of Beijing.
As published in the Federal Law Gazette on June 23, 2020, the new law (“Siebtes Gesetz zur Änderung des Vierten Buches Sozialgesetzbuch und anderer Gesetze“, BGBl) states that pension benefits granted through pension insurance fund (Pensionskasse) will be protected against the insolvency of the employer.
The German Insolvency Insurance Association (Pensionssicherungsverein – PSV) monitors and protects the pension benefits against insolvency i.e., in the event of the company’s insolvency, the employee will receive the full amount of the company pension.
Hong Kong to amend employment laws; Maternity leave to be increased from 10 weeks to 14 weeks
The Hong Kong Legislative Council passed the Employment (Amendment) Bill, 2019 on July 9, 2020. The key highlights of the amendment include:
The implementation of the amendment related to additional pay will be introduced in the first half of 2021, once the expected implementation of other amendments is done by the end of this year.
The employers in Hong Kong should be aware of the changes in employment laws. They will have to change their policies in concern with maternity, paternity leaves, and procedures upon implementation of the law.
The mandatory GST e-invoice regime will take effect from October 01, 2020. Recently, the Central Board of Indirect Taxes and Customs (“CBIC”) has raised the threshold limit for mandatory GST electronic invoices. The annual sales registration threshold for mandatory e-invoices under the Goods and Services Tax Act (GST Act, 2017) is increased from INR 1 billion to INR 5 billion. However, some businesses are exempted from e-invoicing requirements such as financial services, located in special economic zone (“SEZ”), passenger transport services, and goods transport brokers.
Due to an increase in the registration threshold, small and medium-sized businesses are relieved from the e-invoicing requirements.
For the Financial Year ended on March 31, 2020, the deadline for Annual General Meeting (AGM) other than the first AGM has been extended by 3 months from the due date i.e. from September 30, 2020, to December 31, 2020, without filing an application for an extension in Form GNL-1. This does not apply to companies having their 1st AGM due.
Such orders are issued by ROC Pune, ROC Mumbai, ROC Hyderabad, ROC Bangalore, and few other states.
The Companies (Amendment) Act, 2017 provided for displaying the copy of the Annual Return of the company on the website of the company (if any) and the web-link of such annual return shall be disclosed in the Boards’ Report. The Central Government has now notified this provision and the date of enforcement of this provision is August 28, 2020.
MCA has also amended Rule 12 of Companies (Management and Administration) Rules 2014. As per the amended rule, a company that has already provided a web-link of its Annual Return in the Board Report is not required to attach the extract of the annual return with the Board's report in Form No. MGT.9.
The Central Board of Direct Taxes (“CBDT”) issued a notification dated June 26, 2020, for clarification of the tax treatment of allowances and perquisites received by an employee and has opted for a new simplified personal tax regime for the tax year from April 1, 2020, to March 31, 2021.
The following are certain allowances and perquisites which are exempt from tax where an employee has opted for a simplified tax regime:
No tax exemption is granted for any vouchers for food and nonalcoholic beverages provided by the employer. However, the following exemptions are available for an employee opting for a simplified tax regime:
Ireland has reduced Value Added Tax rate from 23% to 21%. The VAT rate stands reduced from September 1, 2020, until February 28, 2021.
From January 1, 2021, workers may take time off on an hourly basis for childcare (ko-no-kango-kyuka) and family care (kaigo-kyuka) .
Short-term nursing care leave is 5-10 days, depending on the number of family members require care. Workers may take these leaves on a full-day or half-day basis. However, from 2021, workers can also take these leaves on an hourly basis.
From June 2020, the national minimum wage in the Netherlands is increased from EUR 1,680 per month.
The Inland Revenue Authority of Singapore (“IRAS”) has introduced of new simplified form for the annual income tax return for companies having a lower annual turnover. The form will be called “form- C-S (Lite)”. The said form can be filed from the assessment year 2020. Form C-S (lite) only requires to fill up certain limited information. Companies filing Form C-S (Lite) are not required to submit their financial statements and tax computations. Companies should however prepare these documents and be ready to submit them if the IRAS requests for them .
The companies with an annual revenue of SGD 200,000 or less (of main income excluding income from other sources such as income from interest) will be eligible to file the form. Additional conditions for companies to be eligible to file this form include:
Further from the year 2020, all companies, including companies intending to file ‘form C-S (Lite)’ are mandatory to file their Corporate Income Tax (“CIT”) returns electronically on or before December 15, 2020.
The qualifying companies with annual revenue of less than SGD 200,000 will save the form filing time with simplified form C-S Lite. The companies may have to change their procedures of information collection for filing as per the requirements of the form.
Singapore’s Personal Data Protection Commission levies a fine of SGD 32,000 on Central Depository for inadequate security measures in protecting personal data
Personal Data Protection Commission (“PDPC”) imposes the fine of SGD 32,000 on Central Depository (Pte.) Limited for failing to put in place reasonable security arrangements to prevent unauthorized disclosure of personal data and insufficient testing mechanism before migrating from one mailing system to another to avoid risk of fraud and financial loss.
Foreign companies and limited liability partnerships are now required to file Register of Registrable Controllers / beneficial owners, with ACRA’s Central Register w.e.f. July 30, 2020
As per the current regulations regarding corporate beneficial owners in Singapore, the companies, including foreign companies and limited liability partnerships are required to maintain the register of Registrable controllers (“RORC”) either at its registered office or at the office of its authorized agent.
As per the new amendment rolled out by the Accounting and Corporate Regulatory Authority (“ACRA”) w.e.f. July 30, 2020, the companies who are already required to maintain RORC have to lodge the information contained in RORC maintained physically to ACRA’s central register (ACRA central RORC) by September 29, 2020.
Further, in case of a change in the information maintained in RORC, the Company shall ensure that such information is updated with ACRA central RORC within 2 business days once updated in the company’s own RORC.
The companies, foreign companies, and limited liability partnerships maintaining the register of registrable controllers (“RORC”) will have to undertake an additional compliance of filing the information contained therein with the central register (ACRA central RORC) before September 29, 2020. The change in the information will also be required to be tracked and updated, before filing.
South Korea plans to increase the individual income tax rate on the highest bracket; Tax will have to be paid at the rate of 45% on income above KRW 1 billion
The Korean Ministry of Strategy and Finance has announced its proposed tax law revisions on July 22, 2020, the changes, however, are still subject to the approval of the Korean National Assembly, if approved the tax rate will take effect from January 2021. The following is the table for the current rates and the revised rates for individual income tax.
Tax base (KRW)
12 million or less
More than 12 million up to 46 million
More than 46 million up to 88 million
More than 88 million up to 150 million
More than 150 million up to 300 million
More than 300 million up to 500 million
More than 500 million
Tax base (KRW)
12 million or less
More than 12 million up to 46 million
More than 46 million up to 88 million
More than 88 million up to 150 million
More than 150 million up to 300 million
More than 300 million up to 500 million
More than 500 million up to 1 billion
More than 1 billion
The taxpayers earning income above 1 billion will have to pay more tax if the proposed law is approved. The employer should ensure that they are aware of the latest rates and should plan and implement withholding and payroll accordingly.
The minimum corporate income tax prepayment regime declared as ‘unconstitutional ’ by the Constitutional Court of Spain
The Constitutional Court of Spain declared that the "minimum CIT prepayment regime" introduced for reducing the public deficit, that was approved by ‘Royal Decree-Law 2/2016’ of September 30, 2016, as unconstitutional. The regime required taxpayers with a ‘net turnover above EUR 10 million’ to prepay 23% of the accounting profit obtained in the 3 rd month, 9 th month, and 11 th month in a year.
According to the judgment issued by the court, "duty to contribute to sustain public expenses, cannot be regulated through a Royal Decree-Law”.
With effect from July 30, 2020, Swedish legislation has implemented the Revised EU Posted Worker Directive into the Swedish Posted Workers Act. Below are the key points of the new legislation:
The new legislation on posting workers to Sweden will increase the compliance burden for employers. The employer will have to ensure that the salary is in line with a Swedish worker before such transfer.
Federal Act on Gender Equality (GEA) implemented
Effective from July 01, 2020, new provisions of the Gender Equality Act (“GEA”) came into force and will be applicable for 12 years, i.e. January 1, 2032.
Private and public employers with more than 100 employees (not including apprentices) are required to create an internal equal pay analysis for the current year by the end of June 2021 at the latest.
Effective from January 1, 2021, Federal law on revision of tax-at-source (Impôt à la source or Quellensteuer) will be implemented. The new law introduces ordinary ulterior taxation (Taxation Ordinaire Ultérieure - TOU) which will affect all the current resident and non-resident taxpayers who are taxed at source. The companies will be required to get registered under revised tax at source rules with authority of tax-at-source of each canton where employees reside. Following are revised provisions of said rule:
On July 23, 2020, the Swiss Federal Tax Administration (“SFTA”) revised term of electronically supplied services (“ESS”).
The revised terms clarify, now foreign companies providing ESS to non-VAT registered Swiss customers and has a worldwide turnover of more than CHF 100,000 per year are required to register for VAT prior to the start of operations in Switzerland.
VAT registration in Switzerland will now apply to most business providing ESS in Switzerland.
From January 1, 2021, the Swiss Federal Tax Administration (“SFTA”) replaced the traditional paper-based VAT return system with the Switzerland Tax Platform. Onward 4 th quarter of the year 2020 the VAT return should be submitted electronically to SFTA. The tax portal provides the facility of filing online Monthly/Quarterly VAT returns as applicable. The Taxpayer can apply for an extension and file a corrective VAT return.
The Transfer of Undertakings (Protection of Employment) Regulations provides employment rights to employees when their employer changes as a result of transfer of an undertaking. These regulations automatically transfer the employment of employees assigned to a transferring business, or part of a business, from the original employer (transferor) to the acquiring business (transferee).
As per the recent case study, under TUPE transfer, any variation in employment contract whether beneficial or not shall be considered as void. Such beneficial variations may be in the form of increase in remuneration packages, bonus payments, termination payment in relation to the length of service, etc.
Currently, UK’s Making Tax Digital (“MTD”) applies to businesses having UK taxable turnover above the VAT registration threshold i.e. GBP 85,000. The Making Tax Digital (“MTD”) regime requires businesses to have digital VAT records and submission of VAT returns through compatible software.
From April 2022, MTD will be made applicable to all UK Value Added Tax (“VAT”) registered businesses irrespective of their turnover. In addition, from April 2023, MTD regime will be applicable to certain business income tax records.
The Information Commissioner’s (“ICO”) has issued an enforcement notice and a monetary penalty notice to “Koypo Laboratories Limited” for instigating the transmission of 21,166,574 unsolicited email communications to subscribers without obtaining their consent.
The penalty notice is issued on the basis of a serious contravention of Regulation 22 of the Privacy and Electronic Communications (EC Directive) Regulations 2003 ('PECR'). It also mentions the reduction of penalty to GBP 80,000 if paid in full to ICO.
Any violation of law will lead to massive costs to businesses and will affect the business adversely.
The Greek government for encouraging the businesses to implement the e-invoice system, has rolled out a number of incentives for businesses. The following are the incentives:
The companies incorporated in Greece will benefit from the incentives upon adopting e-invoicing system. The companies will have to start analyzing, upgrading old systems, and preparing for e-invoicing.
Philippines to Impose VAT on Digital Services at the rate of 12%
Philippines has joined the list of countries planning to impose VAT on digital services. The House Panel approved the bill for VAT on digital services on July 29, 2020.
The registration by a non-resident digital service provider shall be mandatory in cases where:
A digital service provider is defined as an entity:
A digital service provider may include:
A digital service includes, online licensing of software, mobile applications, video games, online games, electronic marketplace services, etc.
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